Generally Accepted Accounting Practices (GAAP) is are a set of standards, conventions and rules that accountants utilize to compile financial statements, in order to offer a certain level of consistency across organizations. Auditors are required to ensure that their financial statements be prepared in compliance with GAAP (Soffer, 1993). Despite this overarching goal of consistency, there is no single source for GAAP. For this reason, the AICPA, in their Statement of Auditing Standards No. 69, has established a hierarchy for these multiple sources. There are four categories (A through D) that establish authority. Should there be a conflict between practices from sources found in more than one category, than the treatment specified in the higher category is expected to be followed.
             Category A sources Include Financial Accounting Standards Board (FASB) Statements of Financial Accounting Standards and Interpretations, Accounting Principles Board (APB) Opinions, and AICPA Accounting Research Bulletins ("AU Section 411", 2007). These are often referred to as "Rule 203 Pronouncements" because it was under this rule that Council was given permission to designate specific bodies to establish accounting principles ("ET Section 203", 1993).
             Category A sources are then followed in the hierarchy by Category B sources. These consist of FASB Technical Bulletins and, if cleared by the FASB, AICPA Industry Audit and Accounting Guides and AICPA Statements of Position. An accountant may receive, individually, Technical Bulletins from the FASB individually or all of them collectively, in the second volume of Original Pronouncements ("AU Section 411", 2007).
             The third category in the GAAP hierarchy is Category C, which includes: AICPA Accounting Standards Executive Committee (AcSEC) Practice Bulletins that have been cleared by the FASB and consensus positions of the FASB Emerging Issues Task F...